India Achieves 20% Ethanol Blending in Petrol Five Years Ahead of Schedule

India has successfully achieved 20 per cent ethanol blending in petrol in 2025, five years ahead of its original 2030 target, Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Wednesday, according to a report by Press Trust of India (PTI).

This represents a thirteenfold increase from the modest 1.5 per cent blending recorded in 2014, marking one of the country's most significant clean energy transitions.

The achievement comes as part of India's broader strategy to reduce dependence on imported crude oil and strengthen energy security. The government had initially set the 20 per cent target for 2030 under the National Policy on Biofuels, but subsequently advanced the deadline to 2025-26.

The economic impact of the ethanol blending programme has been substantial. Ethanol production has surged from 38 crore litres in 2014 to 661.1 crore litres by June 2025, contributing to significant cost savings and revenue generation across multiple sectors.

Ethanol blending, which stood at just 1.5% in 2014, was increased to 20% by 2025. As a result of this clean energy transition, ₹1.36 lakh crore in foreign exchange was saved, ₹1.18 lakh crore was paid to farmers, and 698 lakh tonnes of CO₂ emissions were cut. The progress in energy security, farmer income, and climate efforts was credited to the vision of Prime Minister @narendramodi in a post shared by the PNG minister on X.

The programme has generated Rs 1.36 lakh crore in foreign exchange savings by reducing crude oil imports. Additionally, Rs 1.96 lakh crore has been disbursed to distilleries to fuel industry expansion, while farmers have received Rs 1.18 lakh crore directly.

Environmental benefits have been equally significant, with the initiative cutting 698 lakh tonnes of CO2 emissions through cleaner fuel adoption. The ethanol used in blending is primarily sourced from Indian farms, particularly from sugarcane crops, supporting domestic agriculture.

The Union Cabinet recently revised ethanol procurement prices for Public Sector Oil Marketing Companies for the Ethanol Supply Year 2024-25, running from November 1, 2024, to October 31, 2025, under the Ethanol Blended Petrol Programme. The ethanol is produced from molasses, a byproduct of sugar manufacturing.

India is now considering increasing its ethanol blending target beyond 20 per cent, with the minister indicating that the country has already achieved 19.6 per cent blending in some regions. The government's National Policy on Biofuels, originally introduced in 2018 and amended in 2022, had advanced the target timeline as part of India's commitment to clean energy transition.

The success of the ethanol blending programme positions India as a significant player in the global biofuels market, contributing to both energy security and climate goals while providing economic benefits to farmers and rural communities.